Latest 2024 Updates in Minnesota Cannabis News
Earlier in 2023, Minnesota became the 23rd state to legalize adult-use cannabis . The expansive bill, HF100, established the Office of Cannabis Management (OCM), which has since been crafting the regulatory framework to begin licensing. Originally scheduled to begin in 2025, Minnesota lawmakers are seeking to modify the state’s adult-use cannabis bill to allow for some licenses to be issued in 2024. This newly proposed bill, S.F. 4782, attempts to expedite that process by granting social equity cannabis businesses an initial advantage in entering the emerging market earlier than their competitors.
In preparation for the new regulated cannabis market, the State has also begun cracking down on the sale of cannabis flower that is fraudulently being sold as hemp. The OCM issued a press release on March 12th, 2024, announcing “it will begin enforcement to prevent the illegal sales of raw cannabis flower across Minnesota[.]” Many of these illegal sales result from the confusion around the definition of “hemp”. Under federal law, cannabis must test under a 0.3% Delta-9 THC threshold to be legally hemp, however under State of Minnesota law it must test under a 0.3% threshold for total THC. To support the enforcement, the OCM has engaged the Minnesota Department of Health (MDH) to add inspection and enforcement capacity.
Early Opportunity for Social Equity
The proposed bill authorizes the OCM to issue temporary licenses to social equity applicants. These temporary licenses, valid for 18 months, empower licensees to progress towards operational readiness by securing property, capital, and local building approvals. During this period, temporary license holders are prohibited from engaging in licensed cannabis activities or executing any ownership changes that might affect control. The intention is for these temporary license holders to transition to full licensure promptly after the OCM finalizes its cannabis regulations, anticipated to occur in early 2025, thereby gaining an edge over non-social equity applicants.
Social Equity Eligibility
To be considered as a social-equity applicant, 65% of an applicant's "controlling ownership" must meet the criteria for social-equity status.
An applicant qualifies as a social equity applicant if the applicant is/was:
Convicted of possessing or selling cannabis;
A family member of someone convicted of possessing or selling cannabis;
A Service-disabled veteran, current or former member of the national guard, or any military veteran or current or former member of the national guard who lost honorable status due to an offense involving the possession or sale of cannabis;
A resident for at least five years of a neighborhood that experienced a disproportionately large amount of cannabis enforcement;
Currently a farmer or aspiring cannabis farmer who faces barriers to education or employment (though details on what those barriers may entail are not currently included);
Or a resident of at least five years of census tracts with high poverty rates.
Minnesota Cannabis License Types & Availability
The bill restricts the number of temporary licenses in the first-round as follows:
Microbusiness: 100
Retailer: 50
Testing Labs: 25
Wholesaler: 20
Transporter: 20
Cultivator: 13
Mezzobusiness: 11
Event Organizer: 10
Delivery service: 10
Manufacturer: 6
The same license types for social equity will be made available in early 2025 for all applicants, in which there are over 10 different types to choose from. Vertical integration will be prohibited except for microbusiness, mezzobusiness, and both lower-potency hemp edible manufacturer and lower-potency hemp edible retailer licenses. Currently, the state is deliberating potential alterations to the existing licensing law, shifting from a points-based system to implementing a lottery system. Although not formally adopted, Governor Tim Walz supports this initiative, anticipating limiting potential legal challenges and addressing them within the proposed bill. The license types available will be:
For any license type looking to cultivate, the limitations are as followed:
In addition to the initial restriction on social equity licenses in the first round, the proposed bill implements a new limit concerning the total number of licenses across all rounds for all other applicants, which is as followed:
Retailer: 100
Cultivator: 25
Mezzobusiness: 22
Manufacturer: 12
Ready to Become a Licensed Cannabis Business Owner in Minnesota?
In the upcoming months, the OCM aims to fine-tune procedures and schedules for license applications. Additionally, it will formulate regulations detailing the procedures and timelines for businesses to engage in Minnesota's cannabis sector.
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